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TRANSCRIPT
Abstract—This study examined the effect of ethics-based
leadership on employee virtuous-ethical behavior with an aim
to improve the ethical behaviors among employees in the
marketing agencies in Ho Chi Minh City. Qualitative method
was applied and questionnaire survey was directly delivered to
283 respondents. This study argued that in order to increase
employee virtuous-ethical behavior, marketing agencies should
do the followings a) conduct the ethical course in their
educational program, b) emphasize the people have ethically
behavior and make them good examples the ethical behavior
roles model, c) add the ethical codes and check if the leaders
follow these codes. Besides, the empirical results showed that
the employee virtuous-ethical behavior was directly affected by
factors of ethical leadership, inspirational motivation,
contingent reward ethical leadership, ethical promotion focus,
and ethical prevention focus. In addition, the factors of ethical
leadership and contingent reward ethical leadership indirectly
affected employee virtuous-ethical behavior.
Index Terms—Ethics-based leadership, virtuous-ethical
behavior, ethical regulatory focus.
I. INTRODUCTION
Employee unethical behavior has been a common
phenomenon and is harmful to organizations. In an American
research in 2013, work misconduct was on the trend of
decreasing. It is 41% n 2013 compare with 45% in 2011 and
55% in 2007. However, 60% of corporation misconduct was
committed by manager, and they indicated that misconduct
still continue to exist [1]. A big case of Vietnam was the case
of Vietinbank, in which its staff, Miss Huynh Thi Huyen Nhu
appropriated over VND 4 trillion of other institutions and
individuals [2]. This unethical behavior had severely
damaged the bank.
In addition, it is an advantage for any organization to
understand its employee ethical and unethical behavior. The
concept of unethical behavior was defined as a behavior that
has harmful effects on others and was “either illegal or
morally unacceptable to the larger community” [3]. In
opposite, ethical behavior is that is either “both legal and
morally acceptable to the larger community” or the behaviors
that are not consider as unethical behavior [4].
Moreover, to increase the employee ethical behavior, the
ethics-based leadership was also considered as an effective
factor [4]. The past studies also proposed the relationship
Manuscript received June 23, 2014; revised October 23, 2014.
The authors are with the School of Business, International
University-VNU-HCM, Vietnam (e-mail: [email protected],
between ethics-based leadership and employee behavior. The
ethical leadership had positive effect on follower‟s behavior
by creating an attractive and credible model. That model was
considered as normatively appropriate behavior [5]. In other
word, the ethics-based leadership was not only ethical
leadership but also included ethical charismatic leadership
and ethical contingent reward leadership. These kinds of
ethics-based leadership had effect on employee
virtuous-ethical behavior [4]. In addition, the employee who
had higher self-esteem received more effect of ethical
leadership on their organizational citizenship behavior [6].
Therefore, the purpose of this study was to propose which
factors of ethics-based leadership affected employee
virtuous-ethical behavior.
II. LITERATURE REVIEW
The Effect of Ethical Leadership on Employee‟s Virtuous
Behavior – A Study of Marketing Agencies in Ho Chi
Minh City, Vietnam
Mai Ngoc Khuong and Vo Minh Duc
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
832DOI: 10.7763/JOEBM.2015.V3.294
A. Ethical Leadership
According to [7], the concept of ethical leadership was
defined as “the demonstration of normatively appropriate
conduct through personal actions and interpersonal
relationship, and the promotion of suck of conduct to
follower through two-ways communication, reinforcement,
and decision-making”. In this concept two dimensions of
ethical leadership were built. First ethical leadership was a
moral person with ethical charismatic such as honest,
trustworthiness, altruism. Secondly, ethical leadership was a
moral manager who used their ethical behavior such as
fairness, caring, communicating, rewarding, punishing,
ethical standards emphasizing, and role modeling ethical
behavior to shape follower‟s behavior and attitude [8], [9]. In
line with [7], [10] supposed that morality, fairness, role
clarification, and power sharing were components of ethical
leadership. Therefore, concept of ethical leadership of [7]
was used as the basic for our approach.
To expand the understanding of ethical leadership, [5]
presented the differences of ethical, spiritual, authentic, and
transformational theories of leadership. Firstly, the
similarities of these kinds of leadership were the concern to
other (altruism), integrity, and role modeling. Secondly, the
differences were clarified in each pair. The first pair was
ethical leadership and authentic leadership. Ethical
leadership emphasized moral management and “other”
awareness, but authentic leadership emphasized authenticity
and self-awareness. The second pair was ethical leadership
and spiritual leadership. While ethical leadership emphasized
the moral management, the spiritual leadership
emphasizedvisioning, hope/faith; work as vocation. The last
pair was transformational leadership and ethical leadership.
The differences were while ethical leadership emphasized
ethical standard, and moral management, transformational
leadership focused on vision, value, and intellectual
stimulation. Therefore, we saw the overlap part between each
type of leadership, and also the differences. That evidences
helped us to distinguish the ethical leadership with other
leadership constructs.
Moreover, the ethical leadership played an important role
on follower‟s virtuous behavior. According to [4] the ethical
leadership had positive effect on employee virtuous-ethical
behavior. In case of [4], the ethical regulatory focus factors
were used as mediator factor for the relationship of ethical
leadership and employee virtuous-ethical behavior. In other
dimension, [9] also proposed that ethical leadership had
direct effect on virtuous-ethical behavior and indirect effect
on virtuous-ethical behavior through ethical climate factor.
To supporting to this relationship, [7] also proposed ethical
leadership had positive effect on employee ethical behavior,
such as encouraging employee to do extra job and to report
problems to manager.
In addition, based on past studies, the measurement of
ethical leadership was built. According to [11], ethical
leadership affected on follower‟s ethic-related behavior
through three mechanisms such as role modeling ethical
behavior, communicating ethical rules and regulations, and
using contingent reinforcement mechanisms. Based on that
finding, [7] developed ten-item measurement of the ethical
leadership, which was used in study to measure the ethical
leadership.
B. Ethical Charismatic Leadership
For some reasons, it took time to form the concept of
charismatic ethical leadership. Firstly, ethical standards are
different. As a result, the ethical charismatic leadership of
every standard also varies [12]. Secondly, the difference in
between definition of charismatic leadership and
transformational leadership were blurred by some shared
features. Because of this, many authors has built up the
charismatic leadership paradigm. However, the difference
between the two types of leadership was hard to distinguish.
The concept was then deal based on the mentioned
charismatic ethical leadership and transformational
leadership paradigm [4]. According to [13], the concept of
charismatic ethical leadership was defined as an
“inspirational leaders who convey ethical values, are
other-centered rather than self-centered, and who role model
ethical conduct”. This concept was used as the basic for this
study.
In addition, the past studies proposed the important
implication of ethical charismatic leadership for follower
ethical behaviors. According to [12], charismatic ethical
leaders behaved in a fair and caring action. Their follower
saw that as a trustworthy model and legitimate source of
information to behave. In other words, the charismatic
leadership transferred their value to follower by changing the
follower‟s perception [14]. The ethical charismatic
leadership served as a mechanism for the transferring of the
ethical perception of leader to the follower. Besides, the
ethical charismatic had positive direct effect on employee
virtuous-ethical behavior and positive indirect effect on
employee ethical behavior through ethical regulatory focus
factor [4].
Moreover, based on the Multifactor Leadership
Questionnaire by [4], [15] adapted this ethical charismatic
leadership questionnaire (with three main items) by
supplementing theme of ethic. Firstly, that was ethical
idealize influence behavior, which refer to “the perception
that the leader is charismatic, confident, ethical, idealistic,
and trust worthy” [16]. Secondly, that was ethical idealize
influence attributed, which refer to “leadership behavior the
results in followers identifying with and wanting to emulate
the leader” [16]. Finally, that was ethical inspirational
motivation, which refers to “leadership that communicates
high expectations, inspires commitment to a shared vision,
and motivates followers by portraying optimism” [16]. For
example, a sample item of this measurement was “My boss
talks enthusiastically about what needs to be accomplished in
order to conduct business in an ethical manner.” This
measurement scale was adopted to use in this study to
measure ethical charismatic leadership factor.
C. Contingent Reward Ethical Leadership
Contingent reward ethical leadership was a new concept,
which developed by [4]. According to [17] the concept of
contingent reward leadership, which was a component of
transactional leadership, was defined as “an exchange of
rewards between leaders and followers in which effort is
rewarded by providing rewards for good performance or
threats and disciplines for poor performance”. Based on the
concept of [17], the ethical theme was added by [4] to shift to
ethical contingent reward leadership. The new concept was
understood as the exchanging reward from the leader to
follower based on the ethical or unethical performance of
follower [4].
According to [4], the relationship between contingent
reward ethical leadership and other factors such as ethical
regulatory focus and ethical behavior was expected. The
author suggested that, ethical contingent reward leadership,
which interacted with ethical leadership and charismatic
ethical leadership, had positive effect on ethical prevention
focus. In addition, [18] proposed that, transactional
leadership, which included contingent reward leadership, had
effect on follower‟s prevention focus and follower‟s
behavior. In other words, employee, who considered their
leader having high contingent reward leadership, had their
ethical promotion focus stronger affected by ethical
leadership and ethical charismatic leadership [4]. Moreover,
the promotion focus was proposed to have engagement in
virtuous-ethical behavior [4]. Based on evident above, the
contingent reward ethical was suggested to have effect on
virtuous ethical behavior through employee regulatory focus
factor.
Furthermore, [4] adapted a contingent reward ethical
leadership measurement scale, which based on the contingent
reward leadership measurement of [19] by added the ethic
theme to form the contingent reward ethical leadership
measurement. For example, a sample item of this
measurement was “my boss provides others with assistance
in exchange for meeting standards of ethical conduct”. In
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
833
addition, a new added item was “my boss expresses
dissatisfaction when others fail to meet standards of ethical
conduct”. The new measurement of [4] was used in this
study.
D. Ethical Regulatory Focus
Ethical regulatory focus was proposed by two components,
which were ethical promotion focus and ethical prevention
focus. These two concepts were defined by [4] to have better
performance relationship between ethics-based leadership
and employee virtuous-ethical behavior than original
self-regulatory focus concept of [20]. Furthermore, ethical
promotion focus was defined as “a psychological state that
focuses on achieving moral ideals directed toward actions
that are morally good although not required by social roles”
[4]. In addition, ethical prevention focus was defined as a
psychological state that focuses on ethical thoughts
(including laws, rules and regulations) [4].
Besides, the effect of leadership behavior on ethical
regulatory focus was proposed in last studies. According to
[18], the charismatic leadership had more effect on follower
promotion focus than follower prevention focus. In contrast,
contingent reward leadership had more effect on follower
prevention focus than charismatic leadership. Those results
were expanded into ethical theme, to suggest the relationship
between ethics-based leadership and ethical regulatory focus.
To support the idea, [4] proposed that, ethical promotion
served as a mediator factor in the relationship of ethics-based
leadership and employee virtuous-ethical behavior. Another
author also proposed that, employee ethical-behavior was
influenced by different regulatory focus. Similarly, ethical
promotion focus led to higher result in ethical behavior when
the level of dishonest was high [21].
In addition, the past authors proposed the effect of ethical
regulatory focus on virtuous-ethical behavior. According to
[4], ethical promotion focus motivated employee to do
virtuous-ethical behavior for “achieving their idea of moral
self and satisfying their need for moral growth”. In other
words, ethical prevention focus motivated employee not to
behave unethically [4]. The evidence suggested the positive
effect of ethical prevention focus on virtuous-ethical
behavior.
Moreover, the measurement scale of ethical regulatory
focus, which was built by [4] was used in this study. For
example, a sample item of this measurement was “In my
current job, I think that I should help others even when
it is not mandatory”. The author also proposed the internal
consistency reliability of each scale, which were the ethical
promotion focus scale (α = .90) and the ethical prevention
focus scale (α = .86). In addition, the 5-point likert scale was
used in this measurement instead of 7-point likert scales.
Since, the 7-point scale should only be used when the
variable have a single item or the case which needs more
discrimination. In addition, the internal consistency of both
two types of measurement is unchanged. [22].
E. Virtuous-Ethical Behavior
Through time, other authors proposed their idea on the
definition of the virtuous-ethical behavior concept. The past
author used the unethical behavior measurement as a tool to
define the ethical behavior. They claimed that, a lower score
in unethical behavior meant higher score in ethical behavior.
In other words, this method did not distinguish the difference
between ethical behavior and unethical behavior [23]. In the
other hand, [11] suggested to theorize and test the two terms:
ethical behavior and unethical behavior separately. Moreover,
according to [4], the concept of virtuous-ethical behavior was
defined „as behaviors beneficial to others that reflect moral
ideals and involve personal costs or risks. Virtuous-ethical
behaviors are praiseworthy if performed and not
blameworthy if not performed”. Similarly, [24] also
suggested the concept of virtue ethic similar with the concept
of [4]. Therefore, the concept of virtuous-ethical behavior of
[4] was used as the basis for our approach.
The altruism measurement of [25] was adapted to measure
the virtuous-ethical behavior. In addition, the scale was
suitable for the definition of the concept of virtuous-ethical
behavior since it can explain the behavior go “beyond the one
call of duty and orientation to benefit another party” [4].
However, while the original measurement was dedicated to
supervisor rating, our study based on self-rating of employee.
The need to adapt led us to a suitable measurement. For
example, we changed the supervisor rating from “the
frequency I saw my employee volunteered to help others in
the organization if they fell behind in their work” to the
employee self-rating “the frequency that I volunteered to help
others in the organization if they fell behind in their work”.
The adapted measurement was also in 5-point likert scale.
The effect of ethics-based leadership and regulatory focus
factor on virtuous-ethical behavior was explained in the
previous sections. According to those, the independent
variables were listed as ethical leadership, ethical idealized
influence attributed, ethical idealized influence behavior,
ethical inspirational motivation, contingent reward ethical
leadership. In addition, the dependent variables were listed as
ethical promotion focus, ethical prevention focus, and
virtuous-ethical behavior. The dependent and independent
variables mentioned above were hypothesized in this study as
below:
H1: The factors of ethics-based leadership positively
affect employee ethical promotion focus.
H2: The factors of ethics-based leadership positively
affect employee ethical prevention focus.
H3: The factors of ethics-based leadership positively
affect employee virtuous ethical behavior.
H4: The factors of ethical regulatory focus positively
affect employee virtuous ethical behavior.
H5: Employee virtuous-ethical behavior is hypothesized
to indirectly affect by ethical regulatory focus factors
and factors of ethics-based leadership.
III. METHODOLOGY
A. Question Design and Data Collection
This study mainly focused on virtuous-ethical behavior. In
addition, quantitative method was applied and convenient
sampling technique was used for this study.
The population of this study was the employees of
marketing agencies in Ho Chi Minh City. Based on the
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
834
literature review, questionnaire was designed and sent
directly to 283 respondents of sample size.
The 5 points Likert scale was used in this study ranging “1
= strongly disagree” to “5 = strongly agree” for part 1 of the
questionnaire, which was the self-rating of employee on their
virtuous-ethical behavior. For example, “I willingly gave my
time to help other members in the organization who had
work-related problems.” In part 2 of questionnaire,
employees rated to the frequency of his/her immediate
manager‟s ethical behaviors, also on the 5 point Likert scale
from “1 = never seen” to “5 = very often”. For example, “My
boss listens to what employees have to say.”
B. Factor Analysis and Reliability
Based on the principal component extraction method and
varimax rotation, the two groups of variables were conducted
by two exploratory factor analyses (EFA) to find the
relationship among variables: 23 items of the independent
variables and 15 items of the dependent variables. In addition,
descriptive statistics was used to describe the demographic
data and all other variables in the research model. Moreover,
multiple regressions were used to determine the effects of the
independent variables such as ethics-based leadership on the
dependent variables such as employee virtuous-ethical
behavior and ethical regulatory focus. The results of the
EFAs showed that the Kaiser-Meyer-Olkin measure of
sampling adequacy was .874 for the independent variables
and .940 for the dependent variables. According to [26] the
KMO index suggested minimum value for a proper factor
analysis is 0.6 and less than 1, it meant that the data was
suitable for further analysis. The Bartlett‟s test: the factor
analysis was considered appropriate when significant ≤0.05
[27].
TABLE I: SUMMARY OF DEPENDENT VARIABLES
Given Names Number of
Items
Alpha
Employee virtuous-ethical behavior (EMVIBE) 5 .824
Ethical promotion regulatory focus (EMETPRO) 5 .818
Ethical prevention regulatory focus (EMETPRE) 5 .808
According to Table I, there were three components of
dependent variables extracted from the study data. The
Eigenvalue of each component was greater than 1 (the
smallest value was 1.259). In addition, the extraction sums
proposed that squared loadings of dependent variables was
60.018. It meant the three factors accounted for 60.018% of
total variance. Moreover, the internal consistency of these
factors was illustrating by Cronbach‟s coefficients ranged
from .808 to 8.24. Similarly, according to Table II, three
components of independent variables accounted for 60.62%
of total variance and Eigenvalue of each component was
greater than 1 (the smallest value was 1.420). Moreover, the
internal consistency of these factors was illustrating by
Cronbach‟s coefficients ranged from .802 to .917.
TABLE II: SUMMARY OF INDEPENDENT VARIABLES
Given Names Number of
Items
Alpha
Ethical Inspiration Motivation (INSPIMOT) 9 .917
Ethical Leadership (ETLEAD) 9 .908
Ethic-Based Contingent Reward Leadership
(ETCORELE)
5 .802
IV. FINDING
A. Profile of Consumer Involved in the Study
TABLE III: CONSUMER PROFILES (N=283)
Frequency Percentage
Gender
Male 104 36.7
Female 179 63.3
Total 283 100.0
Age
<18 1 .4
18-25 147 51.9
26-30 108 38.2
31-40 23 8.1
41-50 4 1.4
Total 283 100.0
Type of company
Private enterprise 270 95.4
State Corporation 6 2.1
FDI company 7 2.5
Total 283 100.0
Number employee of
company
<10 49 17.3
11-30 59 20.8
31-50 113 39.9
51-100 50 17.7
100 12 4.2
Total 283 100.0
Education level
High school 5 1.8
College 28 9.9
University 233 82.3
Post graduate 17 6.0
Total 283 100.0
Seniority
<1 year 121 42.8
under 3 years 103 36.4
under 7 years 46 16.3
7- under 10 years 9 3.2
over 10 years 4 1.4
Total 283 100.0
Working experience
<1 year 74 26.1
under 3 years 106 37.5
under 7 years 71 25.1
7- under 10 years 15 5.3
over 10 years 17 6.0
Total 283 100.0
B. Correlations between Ethics-based Leadership, Ethical
Regulatory Focus and Employee Virtuous-Ethical
Behavior
To find out the factor effective on employee
virtuous-ethical behavior, correlation coefficients(r) were
used. The Table IV shows the positive correlation of
independent variables and dependent variable on EMVIBE:
INSPIMOT (r=.542, p<.005), ETLEAD (r=.560, p<.005),
ETCORELE (r=.507, p<.005), EMETPRO (r=.605, p<.005),
EMETPRE (r=.553, p<.005). This meant the better
INSPIMOT, ETLEAD, ETCORELE, EMETPRO, and
EMETPRE could lead to the higher employee
virtuous-ethical behavior.
In conclusion, the EMVIBE was moderately correlated
with ethics-based leadership and ethical regulatory focus as
shown in the correlation coefficients and significant levels in
the Table IV.
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
835
TABLE IV: CORRELATION BETWEEN EMVIBE, INSPIMOT, ETLEAD,
ETCORELE, EMETPRO, EMETPRE
EMVIBE 1 2 3 4
1. INSPIMOT .542*
2. ETLEAD .560* .749*
3. ETCORELE .507* .650* .635*
4. EMETPRO .605* .495* .502* .584*
5. EMETPRE .553* .330* .394* .312* .485*
Mean 3.89 3.55 3.91 3.59 3.86
SD. .692 .715 .648 .653 .658
*. Correlation is significant at the 0.005 level
C. Direct Effects on EMVIBE
1) Ethics-based leadership and employee
virtuous-ethical behavior
Hypothesis 3 was tested by multiple regression and the
result show that EMVIBE was mainly affected by importance
factor: ETLEAD (β=.304, p<.005), INSPIMOT (β=.195,
p<.005), and ETCORELE (β=.207, p<.005). Thus, this study
found out the direct effect of these factors: ethical leadership,
inspiration motivation, and ethical contingent reward
leadership on employee virtuous-ethical behavior. As a result,
the leader, who had high ethical leadership, inspiration
motivation, and ethical contingent reward leadership could
increase the employee virtuous-ethical behavior.
2) Employee ethical regulatory focus and employee
virtuous-ethical behavior
Hypothesis 4 was tested by multiple regression and the
result show that EMVIBE was mainly affected by importance
factors: EMTPRO (β=.463, p<.005), and EMTPRE (β=.335,
p<.005). In sum, this study found out the directly effect of
these factors: ethical promotion focus, and ethical prevention
focus on employee virtuous-ethical behavior. In addition, the
employee who had more ethical regulatory focus had better
virtuous-ethical behavior performance.
D. Path Diagram of Employee Virtuous-Ethical Behavior
The total effect of each variable on EMVIBE was divided
into direct effects and indirect effects. The direct effects were
described by unstandardized regression coefficient (β) and
contributed to the path model as path coefficient. The indirect
effects of each variable were the effects of those variables on
employee virtuous-ethical behavior through the mediate
factors. Figure 1 describes the unstandardized coefficient of
EMVIBE model.
Note: All coefficients were significant at the .05 level.
Fig. Unstandardized Coefficient of EMVIBE Model.
E. Indirect Effects on EMVIBE
Hypothesis 1 was tested by multiple regression and the
result showed that EMETPRO was mainly affected by
importance factors: ETCORELE (β=.417, p<.005) and
ETLEAD (β=.161, p<.005). These two factors affected
EMETPRO, and then EMETPRO positively affected
EMVIBE with (β=.335, p<.005). In sum, through mediate
variable of employee ethical prevention focus, the factor of
ethical leadership created indirect effect on employee
virtuous-ethical behavior.
Similarity, hypothesis 2 was tested by multiple regression
and the result show that EMETPRE was mainly affected by
importance factor: ETLEAD (β=.327, p<.005). This factor
affected EMETPRE, and then EMETPRE positively affected
EMVIBE with (β=.463, p<.005). In sum, through mediate
variable of employee ethical promotion focus, the factors of
ethical leadership create indirect effect on employee
virtuous-ethical behavior.
The indirect effect of the independent variables on the
dependent variables through the intervening variables was
the total product of the effects of that independent variable on
the intervening variables and the effect of the intervening
variable on the dependent variable of virtuous-ethical
behavior [28]. Based on the result of hypothesis above, the
indirect effects of ETLEAD and ETCORELE on EMVIBE
were calculated. The result was showed in Table V, those
were the effect of ETLEAD through EMTPRO (β=.075) and
the effect of ETLEAD through EMTPRE (β=.110). Then the
effect of ETCORELE through EMTPRO is (β=.193).
F. Significance of the Indirect Effects
Table V showed the results of the bootstrapping method
recommended by [28] to test the significance of indirect
effects or mediations. The output provided the bootstrapped
confidence intervals (at the 95%). If there is a ZERO (0) lies
within the interval range between the lower boundary (LL)
and the upper boundary (UL), then we can conclude that,
with 95% confidence, there is no mediation or indirect effect.
On the other hand, if zero does not occur between the LL and
the UL, then we can conclude that, with 95% confidence, the
mediation or indirect effect is significant [16]. As can be seen
in the output of Table V, the indirect effects of ETCORELE
and ETLEAD on EMVIBE through the mediation of
EMETPRO and EMETPRE were estimated to lie between
0.1964 (LL) and 0.4047 (UL); 0.1079 0.2573 (UL); and
0.0690 (LL) and 0.1881 (UL) with 95% confidence,
respectively. Because zero is not in the 95% confidence
interval, we can conclude that the indirect effects of
ETCORELE and ETLEAD on EMVIBE were indeed
significantly different from zero at p <.05 (two tailed) and the
mediation of EMETPRO and EMETPRE in this study were
true. TABLE V: DIRECT, INDIRECT, AND TOTAL EFFECT
Variables
Casual effect
LL
UL Direct Indirect Total
ETCORELE .207 .193 .400 .1964 .4047
ETLEAD-> EMETPRO
.304 .075
.489 .1079 .2573
ETLEAD-> EMETPRE .110 .0690 .1881
INSPIMOT .195 --- .195 --- ---
EMETPRO .463 --- .463 --- ---
EMETPRE .335 --- .335 --- ---
Total 1.504 .378 1.882
EMVIBE
EMETPRO
EMETPRE
ETCORELE
ETLEAD
INSPIMOT
.417
.304
.195
.207
.335
.463
.327
.161
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
836
G. Total Casual Effects of the Employee Virtuous-Ethical
Behavior
Table V was the summary of the direct, indirect, total
effect of the independent variables and the dependent
variables on EMVIBE (hypothesis 5). Regarding the total
effects, the factor of ETLEAD had strongest impact on
EMVIBE (β=.489), followed by the factor of EMTPRO
(β=.463), then the factor of ETCORELE (β=.400), the factor
of EMTPRE (β=.335), and lastly of INSPIMOT (β=.195).
The total effect of these factors on employee virtuous-ethical
behavior was 1.882 in which direct effect of ETCORELE,
ETLEAD, INSPIMOT, EMETPRO, and EMETPRE
accounted for 80% while indirect effect accounted for 20%.
V. DISCUSSIONS AND IMPLICATION
A. Theoretical Implication
The result above was compared with the past studies to
clarify the contribution of this study to the virtuous-ethical
behavior theory. The main question of this study was that
“among the factors idealized influence behavior,
inspirational motivation, idealized influence attributed,
ethical leadership, ethics-based contingent reward leadership
(independent factors) and ethical promotion regulatory focus,
ethical prevention regulatory focus (dependent factors),
which factors affected virtuous behavior of the employee”.
Based on the finding of path analysis performed on figure 1,
the effective factors were inspirational motivation, ethical
leadership, ethical contingent reward leadership
(independent factors) and ethical promotion regulatory focus,
ethical prevention regulatory focus (dependent factors). This
result was similar to the theoretical factors. The findings were
supported by other authors; the influence of leader on their
follower through regulatory focus factors was conducted, the
ethics-based leadership had positive effect on employee
ethical-behavior through ethical regulatory focus [4], [18],
[29].
In other words, the past studies proved that the ethical
contingent reward as the transactional leadership had no
relation to perform ethical promotion focus but was related to
ethical prevention focus [4], [18]. The finding of this study
gave a new point of view that the ethical contingent reward
had positive effect on ethical promotion focus but not on
ethical prevention focus. That led to a suggestion that the
leader who had high ethical contingent reward leadership not
only increased the employee‟s ability to focus more on
following the rules, laws, etc., but also increased their
intention to perform the ethical idea and ethical behavior
which were not forced by regulations.
Besides, an interesting finding was the correlation of
ethical contingent reward leadership and ethical leadership to
perform ethical promotion focus. Comparing with [4], the
author claimed that the correlation of ethical leadership and
ethical charismatic leadership affected ethical promotion
focus factor. The population in marketing agency industry
was not only gave the differences in employee perception of
leadership styles, but also supported for the ethical leadership
as the most effective factor on regulatory focus factor. In
addition, that result showed that the ethical charismatic
leadership was transferred to ethical contingent reward
leadership as a normal trend. That was the employee focused
on getting more reward by behaving in ethical way, instead of
the employee behaving ethically by considering leader
ethical charismatic inspiration.
Then, it was the relationship of ethical regulatory focus
had positive effect on follower‟s virtuous-ethical behavior,
which was proved again in this study. According to [4], [18],
[29] the employee ethical promotion focus had positive effect
on employee virtuous-ethical behavior. It meant that people
who had high idea to act in ethical ways also became
employee with high virtuous-ethical behavior. Howerver,
this study suggested that the ethical prevention also had the
positive effect on ethical behavior by (β=.335). This
relationship was not much focus on the last studies. In
addition, this relationship made a new approach to the
virtuous-ethical behavior of the employee. The fact that the
employee ,who had mindset in trying to obey and follow the
laws, rules in order to keep the ethical oughts was not only
had negative effect on unethical behavior [4] but also
contributed to employee virtuous-ethical behavior. This
impact was needed investigating in the further research.
Finally, this study contributed to the theory of ethics-based
leadership, ethical regulatory focus and virtuous-ethical
behavior by providing reliable scales to measure theoretical
dimensions such as employee virtuous-ethical behavior,
ethical leadership, charismatic ethical leadership,
ethics-based contingent reward leadership, ethical regulatory
focus factors. In addition, the CFAs result contributing to the
items loaded in each scale was significant, clear and focus
[4].
B. Practical Implication
The virtuous-ethical behavior contributed the positive
effect on the organization by creating the favorable
environment, increasing the effective communication,
increasing the productivity of both individual and
organization [25]. Therefore, the understanding of factors
effective on virtuous-ethical behavior would be at the
advantage of any organization. The practical implication was
presented from the finding of this study.
First of all, since the ethics-based leadership was proposed
to have positive effect on employee virtuous-ethical behavior
(which was similar to the result of [4], the ethics-based
leadership should be considered by the manager of marketing
agency in order to improve the employee virtuous-ethical
behavior. Therefore, the marketing agency should conduct
the ethical course as a part of their training program to
increase the ethical behavior of both leader and employee. In
addition, the training topic should include the ethical
communication, ethics-based rewarding. Besides, the
training topic should emphasize on the people who behaves
ethically and made them ethical behavior roles model [9],
[30]. Thus, through training program that focuses on ethic,
the ethics-based leadership could become familiar to
organization‟s member and encourage the development of
moral leaders [30].
Then, the finding that the ethical regulatory focus had high
positive effect coefficient on employee virtuous-ethical
behavior, which made ethical regulatory focus as an
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
837
important factor to increase the employee virtuous-ethical
behavior. Moreover, the method which increases the effect of
ethics-based leadership on the moral idea of regulatory is
very significant in the improvement of employee
virtuous-ethical behavior. Thus, it proposed that the ethical
code should be applied on the leaders before it can be
followed by employees for this will create experience on
action norm for these employees by affecting their own
experience and at the same time, include their good will in
ethical regulatory focus [4]. In addition, some basic activity,
which can contribute to ethical behavior, may include talks
on ethic, stories that promote ethical behavior, ethical
behavior report regarding performance evaluation, and
role-playing ethical situation [31].
VI. CONCLUSION
In conclusion, this study succeeded in achieving the
research‟s objective. These were: Firstly, identifying the
factors of ethics-based leadership which affected
virtuous-ethical behavior through ethical regulatory focus
factors; Secondly, the measuring the direct effect and indirect
effect of independent variables such as inspirational
motivation, ethical leadership and ethical contingent reward
leadership on a dependent variable, which as virtuous-ethical
behavior, through mediator factors such as ethical promotion
focus and ethical prevention focus; Thirdly, discussing and
suggesting the implications to improve the employee
virtuous-ethical behavior by affecting to ethics-based
leadership and ethical regulatory focus.
In other words, this study recorded that the measurement
used to measure the ethics-based leadership, ethical
regulatory focus and virtuous-ethical behavior was
significant. On the other hand, some items of each
measurement were excluded to increase the better
performance of each scale by subjective and objective
reasons. Therefore, further researches should apply this result
to support clearer and more complete measurements.
Finally, this study argued that to increase the employee
virtuous-ethical behavior, marketing agency should focus on
improving ethics-based leadership and ethical regulatory
focus. These the factors are ethical leadership, inspirational
motivation, ethical contingent reward leadership, ethical
promotion focus, and ethical prevention focus which had
direct effect on employee virtuous-ethical behavior. On the
other hand, the ethical leadership and ethical contingent
reward leadership had indirect effect on employee
virtuous-ethical behavior through ethical promotion focus
and ethical prevention focus.
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Vo Minh Duc is a research assistant of School of Business
Administration-International University-Vietnam National
University-Ho Chi Minh.
Journal of Economics, Business and Management, Vol. 3, No. 9, September 2015
839
Mai Ngoc Khuong is a lecturer and researcher of School
of Business-International University-VNU-HCM. He
has bachelor degree in tourism and hospitality
management, master of science degree in leisure, tourism
and environment at Wageningen University, the
Netherlands, and PhD degree in Development
Management at School of Public Administration of the
National Institute of Development Administration
(NIDA) Bangkok-Thailand.